Your Down Payment

Many people who are looking to buy a new home can qualify for various loan programs, but they don't have much to pay a down payment. Here are a few tips:

Tighten your belt and save. Be on the look-out for ways you can trim your monthly expenditures to put away money for a down payment. Also, you can look into bank programs through which some of your take-home pay is automatically deposited into a savings account every pay period. Some effective approaches to put together funds include moving into housing that is less expensive, and staying local for your vacation for a year or two.

Work a second job and sell items you do not need. Try to get an additional job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get serious about the possessions you actually need and the things you migh be able to sell. A closetful of small things can add up to a nice sum at a garage or tag sale. You could also explore what any investments you own may sell for.

Tap into your retirement funds. Check the provisions of your particular program. Many people get down payment money from withdrawing from their IRAs or borrowing from 401(k) programs. Make sure you understand about any penalties, the effect this could have on your taxes, and repayment terms.

Ask for a gift from family. Many buyers are often lucky enough to get down payment help from thoughtful family members who may be anxious to help them get into their own home. Your family members may be eager to help you reach the milestone of owning your own home.

Learn about housing finance agencies. Provisional mortgate loan programs are given to homebuyers in certain situations, like low income homebuyers or homebuyers looking to renovating homes in a targeted area, among others. Working with a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other perks. These kinds of agencies may assist you with a lower rate of interest, help with your down payment, and provide other benefits. These non-profit agencies exist to build up the value of homes in particular places.

Find out about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low and moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting home financing. FHA helps first-time buyers and others who would not be eligible for a typical loan on their own, by providing mortgage insurance to the private lenders. Interest rates with an FHA mortgage are usually the current interest rate, while the down payment requirements with an FHA mortgage are lower than those of conventional loans. Closing costs can be covered by the mortgage, and the down payment could be as low as 3% of the total.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan does not require a down payment, has limited closing costs, and provides the advantage of a competitive interest rate. While the VA does not finance the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the home's price, while the first mortgage finances 80 percent. The borrower covers the remaining 10%, rather than putting the typical 20% down payment.

  • Carry-Back loans

    We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. You would finance the majority of the purchase price with a traditional lending institution and finance the remainder with the seller. Usually you'll pay a somewhat higher rate with the loan financed by the seller.

The feeling of accomplishment will be the same, no matter which method you use to come up with your down payment. Your new home will be your reward!

Want to discuss your down payment? Call us: 407-834-3377.

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